How can you stop a default on a loan? What can a bank do to help you?
Generally speaking, the best way to prevent a loan from default is to bring any delinquent balance current and to continue making the regular loan payments as required by the credit contract.
The only other way is to refinance that existing loan and replace it with a new one that you can afford. Bills.com makes it easy to compare mortgage offers and different loan types. Please visit the loan page and find a loan that meets your needs at:
If you cannot refinance the loan and you cannot afford to continue making your regular payments, you should contact the creditor to discuss any assistance the creditor can offer you to help you keep your loan current, such as lowering your monthly payments or moving the delinquent balance to the end of the loan. Depending on the type of loan, the creditor may be willing to negotiate with you to prevent your defaulting on the note. For example, mortgage lenders tend to be more willing to negotiate modified repayment terms than credit card companies, as mortgage lenders have much more invested in the performance of the mortgage note, and the foreclosure process can be quite expensive. Credit card lenders, on the other hand, tend to be much less flexible in negotiating with cardholders, at least those who are current on their payments, as the credit card banks do not have nearly as much riding on your ability to make your minimum payments in a timely manner.
Many loan agreements and States' laws require creditors to provide consumers written notification before their delinquent loans are declared in default, providing debtors with one final opportunity to prevent their loans from going into default. This letter is generally referred to as a "notice of right to cure default." While not all loan agreements require creditors to provide this notice, many common debts, such as auto loans, mortgages, and unsecured personal loans, often require a notice of right to cure letter to be sent before the creditor can declare the loan in default. However, you should not wait to receive this notification before taking action to resolve the possible delinquency, as not all loan types require them to be sent, and even when they are required, creditors sometimes fail to send the letters as required.
Regardless of what type of loan you are having trouble repaying, you should contact the lender to discuss what options it can offer you to assist you in keeping the loan out of default. I understand how stressful it can be to contact a creditor when you are behind on your payments, but the longer you allow this matter to go unaddressed, the less likely you will be able intervene before the loan goes into default. Once the loan goes into default, you may have more difficulty negotiating a new payment arrangement. In addition, if the loan is secured, such as an auto loan or mortgage note, you may be facing repossession or foreclosure of the property securing the loan if you do not resolve the delinquency quickly. If you would like to read more about the foreclosure process, I invite you to visit the Bills.com Foreclosure Resources page.
If the loan in question is secured and you wish to keep the property securing the debt, you will need to figure out a way to continue making your regular payments or contact the creditor and negotiate an acceptable repayment plan. As mentioned previously, if you fail to keep a secured loan current, you could soon be facing repossession. However, if this debt is unsecured, and the creditor is unwilling to negotiate an alternative repayment arrangement with you directly, you may want to hire a professional debt resolution company to assist you in resolving the debt. A debt resolution agency, such as a credit counseling or debt settlement firm, may be able to negotiate a settlement or payment plan with your creditor to pay off the delinquent debt, though the loan will likely go into default during this process. Defaulting on an unsecured debt, such as a credit card or personal loan, will likely damage your credit rating; however, since the creditor will not be holding the threat of repossession or foreclosure over your head, you should have many more choices when deciding the best way to resolve the account. To learn more about many of the debt help options available to consumers, I encourage you to visit the Debt Help Resources page of Bills.com.
For additional ideas on ways you manage your debt, please visit the Bills.com Debt Pointers page. I wish you the best of luck in resolving your delinquent debts, and hope that the information I have provided helps you Find. Learn. Save.